Amazon taps a company veteran to lead its new pharmacy business, including PillPack

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Amazon has tapped 14-year company veteran Nader Kabbani to run its new pharmacy business, including the team that came in through last year’s acquisition of PillPack, CNBC has learned.

Kabbani, who helped build Amazon’s Kindle self-publishing platform and has served as vice president in the logistics and Flex businesses, is now “vice president of consumables, special projects,” according to an internal document that was viewed by CNBC.

The entire team at PillPack, which Amazon bought for more than $800 million in June, reports directly to Kabbani, the document says. That includes CEO TJ Parker, product chief Elliot Cohen and technology head Alan Gao.

Amazon declined to comment.

The pharmacy business has huge potential for Amazon. In the U.S., more than 4 billion prescriptions are ordered annually, and spending is expected to top $600 billion in the next few years, much of that covered by insurers and Medicare and Medicaid. With PillPack, Amazon is poised to take a slice of the growing home delivery market, though it could also potentially incorporate retail pharmacy offerings at Whole Foods locations, after buying the upscale grocery chain for more than $13 billion in 2017.

Kabbani’s appointment shows Amazon is putting one of its most ambitious new projects in the hands of a trusted company executive with plenty of experience in supply chain and logistics, but no background in pharmaceuticals or health care. He was in charge of Amazon Flex, the company’s program that hires individuals to make deliveries on a flexible schedule, as well as other aspects of Amazon’s last-mile delivery strategy. His LinkedIn page has him listed as the vice president of Flex since March 2017.

The pharmacy and distribution industries have been watching Amazon’s every move.

Following the announced acquisition of PillPack, shares of drug distributors and pharmacies plummeted, with Walgreens Boots Alliance plunging 9.9 percent and McKesson dropping 6.1 percent. CVS Health, Cardinal Health, AmerisourceBergen and Rite Aid also fell on concern that Amazon would eat into their markets. Pharmacy is a notoriously challenging sector, given the dominance of brick-and-mortar incumbents and the middlemen that negotiate drug prices and manage their distribution.

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